T
THINK Contributor

Why personalization in advertising is more than just a fad

By , February 16, 2017
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In a recent survey, personalized and intent-based marketing was the top trend for marketers with some 57% expressing interest.

While reaching the right consumers with the right message at the right time has always been the goal of marketers, it was previously assumed that many consumers seeing the message might not be interested in it. Traditional cable television and print advertisers are particularly aware of this.

In the television world, a big change in this approach occurred when programmatic buying became standard and when subscription-based streaming services such as Hulu became popular. In 2010, Hulu introduced Ad Tailor, a revolutionary change to TV advertising, because it allows users to mark if an advertisement is relevant to them and enables Hulu to choose better ads for the user. In 2011, Hulu introduced additions to Ad Tailor: Ad Selector and Ad Swap. Ad Selector prompts the user to choose 1 of 3 ads, while Ad Swap allows users to choose a different ad if the current one is not relevant to them. Asking what ads users would like to see became a model other outlets followed as well.

Personalization looks different on the Internet, though, where data collection for the sake of retargeting is ubiquitous and often happens without the user’s knowledge. A 2014 study found that 55% of consumers were repelled by retargeted ads.

But when you provide value to users, such as recommending products they’re interested in or content based on what they’ve previously read as some publishers do, retargeting can be welcomed. In a large study by Columbia Business School researchers involving 8,000 people in the U.S., Canada, the U.K., France, and India, 80% of participants said they would share non-required data for reward points, product recommendations, or a tool to help them with complex decisions.

Hayes Roth, founder of HA Consulting, said that it’s possible to upsell consumers using their data without being intrusive or annoying.

“The best-case scenario is Amazon,” he said. “They figured out [early on] that if you liked X you might like Y, but you didn’t get the feeling they were invading your privacy.”

Andrea Bonezzi, a professor at New York University’s Stern School of business, agrees.

“I don’t see that backfiring,” he said. “I think consumers might have seen that as an invasion of privacy years ago but now they’re aware of the fact that their search history is recorded.”

How precision targeting is evolving

State-of-the-art personalization in 2017 means obtaining a view of a consumer’s journey and various touchpoints with a brand, then intervening to help push the consumer toward a purchase or brand affinity. For instance, a customer might signal their interest with a search for an electric toothbrush either via Google or Amazon. Then a retailer (like Amazon) or a manufacturer (like Philips, maker of the Sonicare electric toothbrush) might run reminder ads that are designed to keep that purchase intent top-of-mind. This is an opportunity for both retailers, manufacturers and rivals. If a consumer searches for a Philips Sonicare toothbrush, then Oral B might run ads for its Precision Black toothbrush.

If the consumer doesn’t click on the ad, after a certain period of time determined by data from past customer journeys, the advertiser can opt to stop the ads. On the other hand, if the consumer clicks on the ad but doesn’t buy it (online at least), then the manufacturer might continue running ads and maybe up the ante with offers to spur a purchase. With cross-device targeting, these messages can occur sequentially on a desktop, smartphone, and tablet. Furthermore, the advertiser can maximize them for frequency, so the consumer doesn’t see the ad too often and become annoyed.

Despite the technological advances with the collection and real-time analysis of data for the sake of personalized user experiences, a 2016 survey found CMOs think fewer than 20% of the people they reach are potential buyers.

The industry will evolve to anticipate the needs of consumers rather than react to their activities. One method is by employing dynamic creative. Typically, marketers craft creative messages and then distribute them via media. With dynamic creative, marketers create many messages that can be modified on the fly. For instance, a marketer of sunscreen lotion used dynamic creative to send users mobile messages when the UV index rose. That particular campaign led to engagement rates that were twice the industry average. It demonstrates how studying a consumer’s data, marketers can anticipate their needs. 

Privacy concerns

The downside of such targeting is that it can come across as an invasion of the user’s privacy. Target, for instance, raised concerns a few years ago when it analyzed a consumer’s purchase behavior and correctly predicted that she was pregnant. That level of intimacy with a customer has only been enhanced by the rise of mobile technology. Smartphones have been shown to make relationship partners jealous because of their access. Some 71% of users sleep with their smartphones.

Bonezzi said that marketers don’t have a choice but to go the personalization route.

“As a marketer, the question is, ‘What’s the alternative?'” he said.

Many consumers have signaled their resistance to ad messages by downloading ad blockers on desktop and mobile. While some 300 million people use mobile ad blockers, the blockers don’t affect ads on apps, where users spend most of their time. Although that could change, and there’s also a possibility that carriers could block ads at the network level.

That’s why marketers need to ensure that their messages are helpful without being too invasive. In 2017, many marketers will be attempting to toe that line. Here are four ways they can do it:

1. Timing is everything. You might have the right message, but if a consumer is busy with something else, the message is just annoying. “Are you activating the touch point at the right point?” asked Bonezzi. “Are you really getting me at the right moment?”

2. Make use of frequency caps. At a certain point, even well-targeted ads become counterproductive if the consumer sees one execution too many times. Data from previous campaigns should inform the optimum frequency target.

3. Continue the narrative across devices. People behave differently on different devices. A laptop might be used primarily for work, for instance, and a smartphone for shopping. Ideally, a pitch should use multiple devices to move the consumer through the funnel.

4. Don’t forget the message. In ad tech, there has been an emphasis on distribution over the past few years that has overshadowed the primacy of messaging. Consumers aren’t moved by data though; they’re moved by messages that speak to them.

Learn how to take your customer engagement to the next level with real time personalization in this white paper: The right time for real time marketing.

Todd Wasserman was Mashable’s Business and Marketing Editor. Todd has been writing professionally for over 20 years. From 1999-2010, he covered the advertising and marketing industry for Brandweek, which promoted him to editor-in-chief in 2007. Todd is a paid contributor to THINK Marketing. 

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